Financial Contrast: Tanger (NYSE:SKT) and Highwoods Properties (NYSE:HIW)

Tanger (NYSE:SKT) and Highwoods Properties (NYSE:HIW) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, earnings, profitability and institutional ownership.

Risk and Volatility

Tanger has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500. Comparatively, Highwoods Properties has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Tanger and Highwoods Properties, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tanger	0	3	3	0	2.50
Highwoods Properties	1	4	1	0	2.00

Tanger presently has a consensus target price of $32.33, suggesting a potential downside of 3.71%. Highwoods Properties has a consensus target price of $29.33, suggesting a potential downside of 10.65%. Given Tanger’s stronger consensus rating and higher probable upside, research analysts clearly believe Tanger is more favorable than Highwoods Properties.

Earnings and Valuation

This table compares Tanger and Highwoods Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tanger	$464.41 million	7.91	$99.15 million	$0.90	37.31
Highwoods Properties	$834.00 million	4.18	$148.71 million	$1.34	24.54

Highwoods Properties has higher revenue and earnings than Tanger. Highwoods Properties is trading at a lower price-to-earnings ratio than Tanger, indicating that it is currently the more affordable of the two stocks.

Dividends

Tanger pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Highwoods Properties pays an annual dividend of $2.00 per share and has a dividend yield of 6.1%. Tanger pays out 122.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Highwoods Properties pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

85.2% of Tanger shares are held by institutional investors. Comparatively, 96.3% of Highwoods Properties shares are held by institutional investors. 5.8% of Tanger shares are held by insiders. Comparatively, 1.6% of Highwoods Properties shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Tanger and Highwoods Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tanger	19.65%	17.28%	4.28%
Highwoods Properties	17.40%	6.05%	2.40%

Summary

Tanger beats Highwoods Properties on 11 of the 16 factors compared between the two stocks.

About Tanger

Tanger Inc. (NYSE: SKT) is a leading owner and operator of outlet and open-air retail shopping destinations, with over 43 years of expertise in the retail and outlet shopping industries. Tanger’s portfolio of 38 outlet centers, one adjacent managed center and one open-air lifestyle center comprises over 15 million square feet well positioned across tourist destinations and vibrant markets in 20 U.S. states and Canada. A publicly traded REIT since 1993, Tanger continues to innovate the retail experience for its shoppers with over 3,000 stores operated by more than 700 different brand name companies. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission (“SEC”) that includes a supplemental information package for the quarter and year ended December 31, 2023.

About Highwoods Properties

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (REIT) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Highwoods is in the work-placemaking business. We believe that by creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stakeholders.